A Simple London Breakout V.2

Which one? Please PM me if you don't want to post an indi on mer's thread. Always checking out good SR indi's I also found that the success rate was higher when the price was more in the middle of the box at the time that it formed, but didn't develop a system for it, though.

Panthere,
You can go here and extract the code for auto GMT/DST adjustment I provided for the EA and insert it in the indi. You'll see, it's quite straigthforward.

CelticHeart,

On JohnnyBSmarts post 587 there is an offset semafore indi that works pretty well. There is also some others out there I am experimenting with.

I am finding it useful in not only avoiding bad entries, but when it looks like a breakout will not hit my target due to hitting one of these points, I take the opportunity to close the trades in profit before PA heads the opposite direction.

GLTA!

ScottyB

Here is yesterday and today's chart (I do use this Live). I use the original LBO set-up but the modded EA code I posted in this thread.

4 Wins yesterday on 4 entries and 5 today on 3 entries. (it's been like this since I started Live few weeks back).
My philosophy: LBO is meant to quickly extract some pips. It's not a long term strategy as per "order-life". So I'm quickly stacking pips, I don't let orders run as I want to limit my DD and chances of reversal.


Beside the original EA entry point yesterday, every blue square you see is a manual entry I made, and every blue "Check-Sign" is an exit for whether "modified TP1, TP2 and TP3". As soon as TP1 is hit, I move the remaining 2 orders at BE+5 (my broker has an average of 2.5spread).

I use whatever comes first for TP: Fib-Support/Resistance or Original TP as detailed by Mer's strategy. See how many pips I extracted from the market.

Relating to your method, you may see on the previous chart that today I did not exit at Pivot level. This is because I have a minimum deviation I believe should be respected with the box lower band (today it was 6-7pips, it's too close to my BE). 15pips, I would have slide TP1 to Pivot level and stack few pips in my pocket.

Going back to not trading because of S/R I agree only if the Box size is that of Pivot/Sup or Res, or actually include the whole Pivot/Sup/Res .. yes it happens over time (I remember that occurred few times in backtesting 2005 and 2006.) and can actually relate this to volatility so it makes total sense to me.

However, were I'm heading right now is to dynamically adapt the Box range with respect to how close it is to one of S/R. This does not mean moving the box, it means moving up/down one of upper/lower box band so as to let enough deviation with S/R as per my standards.

I will not go back to my whole explanation and illustration that I provided earlier during my kinda discussion with Johnny (basically, not putting the lower/upper box limit at S/R while considering the original Box set-up) but if anyone is interested, PM me, I will gladly share where I go, specifically if you are the kind of guy that puts his money where his mouth is. Eventually, will come back and post the results once this strategy is more thoroughly tested.

Squalou,
Here is the "fix" I use live.

At the beginning of the Start{} loop, simply look if there is one order less than in the previous run of Start{} at tick-1.

If so, check History for Open (you don't to move TP2 and 3 to BE if what closes was a previous order running), if Open was today, then TP1 was hit, move TP2 and 3.

Done, simple, and independent of any price-trigger. (let me know if there is anything wrong)

X.

Let's look at box positions to understand the whys and wherefores of the best box positions.

The first chart shows the M15 and different box positions. The ultimate positions are quite obvious highlighted in Aqua. The PA is all headed in one direction and it's back up the truck and load the pips. These very rarely occur spot on the London Open or any Open for that matter. If you put the box on top or below these your stops will never be hit.

Now let's look at the BAD BOX POSITION depicted as a dark orange rectangle with an "X". This is the position the program initially put the box and when I refreshed the screen it jumped up to the GOOD BOX POSITION.

I want you to think of the PA action as a highway and this highway has big rigs running 80 MPH in one direction. Would you want to stand in their way? Well putting the box inline with the PA trend is exactly the same thing. The Bad position Box is going to get hit and I guarantee you're going to lose some pips and your bank account is going to need resuscitating.

The GOOD BOX is within the confines of the start and end times and is acceptable to keep us out of harms way. The problem is the bottom of the box is below the last line of resistance and therefore is open for a hit on any retrace.

The FAIR BOX POSITION depicted in dark blue is also way below the last line of resistance and again may be hit with a retrace. Why play near the highway and get run over by a truck?

The BEST BOX POSITION is at the line of the last point of resistance. Weak but resistance all the same.

Now let's look at the same chart but on the H1. You see the FAIR box getting run over. The BAD box had a narrow miss and the first trade would have been a loser with the standard method. There are no losers on the
other box positions. The standard method would have put the box just above the BAD box and directly in harms way. Not a good choice.

Now let's look at the same chart but on the H4 chart. All the noise as they say is gone and only the ULTIMATE POINTS of support and resistance remain. Notice the vertical red lines depicting the London Open which show all of them nowhere near the swing highs or the swing lows.

In all cases and on every chart please notice the stochastic indicators which show price exhaustion every single time.

Where do you want your box?

Happy trades and stay out of the way of those big rigs.

Johnny

Johnny...........................WHILE your advice about 4H charts is excellent, I get a headache looking the charts you uploaded, what are you trying to show here..............I can't make anything out of your charts.....just confusion.

squalou,

My personal opinion is the RSI is way over rated and I will not use it on a chart. The standard stochastics is a fairly good indicator but peaks to quickly or never reaches the top before turning. On long wick candles you have to be watching it to see the price hit the high as the final stochastics value is the closing value which is purely worthless. The RSI moves so little it's hard to see if it is alive or dead and again the closing value is the problem as is with all indicators. The closing value is showing what's left after the profit takers got done with it. I don't want the left overs.

Every indicator I use I alter the code to show the High value and the low value. I close my positions based on either hitting resistance or support and the indicators value. If both indicators are at 100 for both the K & D values and the PA is at resistance the price will reverse.

Using the closing value for anything is crazy as this is a meaningless number. Why would I want to wait for the close to make a buy or sell position. I will pull the trigger on the high of an up candle which occurs late in the formation of the candle as then the PA will then retreat to the close. On a down candle I will take the high which occurs first before going down to the low and back up for the close.

As far as determining trend a standard deviation or linear regression works very well but with the M15 it is a small amount of time. We are dealing with a two to four hour period and if we just gotta have that first trade exactly at 3:00 EST then we are looking at the trend of the M15 at a very short interval of time which is the whole problem. The standard method places the box in the middle of a four lane highway and we are getting run over by a big rig.

quoted by squalou:
the basic principle of the strategy is again to use the calm zone to form our (small) box, and wait for momentum to produce breakout, and start from there.

This just isn't true and I challenge you to look at any chart and show me where this occurs before 3:00 EST. There is no calm zone. We are not making money on the volume ups and downs but only the price action. Volume may be taking a break before the LO but the price sure doesn't and that's why this isn't working so well at the LO.

There are exactly zero break outs at the LO. Why? Because a break out by definition requires a consolidation of price which depicts market indecision. Once direction is established by either more sellers then buyers or the other way around then and only then does the price break out of consolidation.

So what do we really have here. It's simply lower volume sometime during the Asian session on some days. That's all we see so what is happening prior to the LO. A lot of price movement starting after midnight.

But since this thread is about the London Open let's try to keep the theme the same and see what we can do to improve it from that standpoint.

Determining the box placement off the last #3 semafor would give us PA direction but not necessarily the trend but who really cares as long as we make positive pips. The other problem being is that knowing direction off the last pivot point doesn't tell us price exhaustion as far as the last candle is concerned if that candle is a long time away from the last #3 pivot. This is only a problem if time is entered into the equation which is my point with a floating box. A linear regression channel from the last pivot would show the relationship of the PA to the outside channels and hence whether making a trade is a wise decision. The placement of the box would be above the down direction and below the up direction. The best placement assuming the box position is not totally time restricted would be at a #3 pivot.

The chart below shows this movement of the box and the advantages are many. We placed the initial box to catch a directional move which in this case was a with the M15 trend move. When a #3 semafor appeared at the end of the initial move the box moved to this position and now we play the counter trend move down. This box movement places the box at a more favorable and stronger point of resistance minimizing the chance of a stop loss hit.

The second chart shows the next movement of the box which again protects from a stop loss hit and also takes the box out of the consolidation area and resulting oscillating PA which would drive us nuts sitting on the initial boxes buy line.

As you can see we didn't have a losing trade. I believe this is the method we should strive for in either method as after the 3:00 Open it is no longer a London Open thingie.

The #3 chart shows the standard method which as you can see is a complete train wreak.

Johnny

jackm1,

Look at the Boxes in relationship to the Price action. Damn now I know why my head aches all the time but I'm completely confuzzeled over your confusion. Take two aspirin and call me in the morning.

Johnny

Only one little question to the great thinkers: did you think to use as box the bars 1 hour before news?
In the chart below is a system in development (the boxes are not the right).
In the lower window the green histograms show the small BarRanges according to which follow large movements, which one can trade with great safety.

This is my 200% Accurate Method ...
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Hi Swingman,
That looks interesting. I know of someone who trades red news, using 15 min charts, where he will take a breakout of the candle with the news - on the assumption that traders have decided by then what direction to move price based on the news.

Could you please post your indicator you are using, looks very good.

Many thanks.
Pardy

stupid question (anyway I'm not a clever girl :-))
If this method works is what is increasingly known not likely to destroy it because it is sufficient that the bulk (banks, institutional etc. ..) know our points of entry and they can stop us easily and thus save a lot money because we have not so?
or the fact that it is known by more and more people fueling this method?

FRENCH

question bête ( de toute façon je suis pas une fille intelligente :-) )
si cette methode fonctionne le fait quelle soit de plus en plus connue ne risque pas de la détruire car il suffit que les gros ( banques ,institutionnelle etc..) connaissent nos points d'entrée et ils pourrons nous contrer facilement et donc gagner pas mal d'argent grâce a nous oui non ?
ou bien le fait quelle soit connus par de plus en plus de monde alimente cette méthode ?

Hi guys, what is the latest version of this EA and can someone please attach it? Many thanks in advance!

hehe....
that's my "news trading" BO template for 14:30(gmt+2) news trading;
been using that for a while (since LBO V1 actually!) and works really great.

Put it on M1 charts.

As you can see from the template, i use a very short box -- only 5 minutes before news release, and limit it to 10p max only, so i get in the trade whatever direction it breaks when the news is released...

SQ

I put your template but I have only one moving average on my screen and the list of indicators on your template that I also moving average?
thank you

FRENCH

j'ai mis ta template mais j'ai uniquement une moving average sur mon ecran et dans la liste des indicateurs sur ta template j'ai aussi que la moving average ?
merci

bank, institutional etc only able to move the prices for temporary only. I think they won't move against the trend. the breakout system that offered here basically only follow the trend.

Hi SQ,

You might have missed my post above, re the "Expand Box to min". Think it would be quite useful in the ea, could we pls add that in, obviously your time permitting. Many many thanks.

Regards
Pardy

You have yourself some nice volatility indicator if you consider each time one of these histogram bar intersect with your blue average ;-) Is it repainting ? I've been looking for something like this for my grid strategy.

X.

PS: OK, I was not totally out of my mind when I realized the volatility thing. I dug into FF and found your Thread, thanks for sharing - I'll start going through your method this WK-E:

Very nice, this is the mini box news trading...!
But is also possible to use the macro box with the same or other trading rules, at least with martingale...

You are right! The blue and red histograms identify very good the market impulses. They identify with 90% precision the daily events. Interesting is that for some pairs they gives signals 15-30 minutes before the events (the rest of 10%).
Possible is every time to trade the PA after such impulses (Shockwave theory), and the other possibility is to identify statisticaly the times of the appearances.

Here the Vola indicator for you...
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